Core Sector Growth Moderates to 5.2% in March

In March, the growth of India’s core sectors slowed to 5.2% from February’s 7.1%, primarily due to the statistical effect of a high base. However, sequentially, there was a notable increase of 9.9%, marking the highest growth in a year.

Year-on-Year Analysis

• Energy Sector: While coal and cement production expanded, the output of crucial sectors like crude oil, natural gas, and refinery products experienced a slowdown.
• Refinery Products: Notably, the production of refinery products, with a significant weight in the core sector index, contracted by 0.3% year-on-year.
• Natural Gas and Crude Oil: Growth in natural gas and crude oil production eased compared to February, attributed partly to lower growth in exports.

Sectoral Insights

• Coal and Cement: Both sectors saw robust growth, driven by increased industrial activity, heightened demand for electricity, and government-led infrastructure projects.
• Fertilizers, Cement, and Electricity: Conversely, the growth of sectors like fertilizers, cement, and electricity witnessed an uptick.

Outlook

• IIP Growth Projection: Economists anticipate a moderation in Industrial Production (IIP) growth in March, estimating it to be within the range of 3.5-5%, as the leap year effect diminishes.